It claimed that at least six Sea Tiger guerillas were killed and two of their boats destroyed during the confrontation that erupted after the naval boats spotted a flotilla of seven Sea Tiger boats and lasted more than an hour.

''Two LTTE boats were reportedly destroyed and six terrorists killed in a pre-dawn fierce sea battle, that erupted between Navy's elite Special boat squadron (SBS) personnel and LTTE, off Nayaru,'' the Defence Ministry said.

''Meanwhile, Air Force MI-24 helicopter gunships providing close-in air support to the Navy elites, have engaged four LTTE craft detected fleeing the combined navy-air onslaught,'' it added.

The Sri Lanka troops have stepped up their campaign against the LTTE and claimed to have captured two key rebel bastions in the north after the weekend clashes.